Deal struck to bring Northern Beaches Hospital under government control

The NSW government has reached an agreement with private operator Healthscope’s receivers to seize control of the Northern Beaches Hospital’s public and private facilities, at a cost of $190 million to taxpayers, Premier Chris Minns announced on Tuesday morning.

The in-principle deal means the hospital’s 494 public beds would be integrated back into the public hospital system by mid-2026 after months of negotiations to unpick one of the most complex privatisation arrangements in the state’s history, NSW government spokespeople said.

“We’ve reversed one of the worst decisions of any NSW government, where a private hospital model was foisted on the people of the northern beaches,” Minns said.

“Not only will future hospitals not go into private hands, but we will bring back this private emergency department into the NSW government system.”

The announcement was scant on information about the future of the hospital’s private services, which account for almost 200 beds and more than 20,000 planned surgeries annually.

The public services at the hospital are currently operated by Healthscope in a controversial public-private partnership (PPP). Minns said the original contract “had north of $800 million as an exit payment to the private owners.”

The hospital has been under intense scrutiny since the death of two-year-old Joe Massa last year, which led to “Joe’s law” banning future PPPs for hospitals. Healthscope went into receivership in May, its owner owing $1.6 billion to lenders.

Holding a pair of her son Joe’s shoes, Elouise Massa said the change was a “monumental step”.

“It is Joe’s love that has given Danny and I the determination, the fierce determination to stand here, to advocate on behalf of the community, because we don’t want anyone else going through what we have gone through, the absolute torment, the heartbreak,” she said.

The hospital will be under the direct control of the Northern Sydney Local Health District, which oversees other major public healthcare services including the Royal North Shore Hospital.

Senior doctors warned that removing private services would result in services closing, longer surgical waitlists and increased pressure on the public system.

Dr Kathryn Austin, president of the Australian Medical Association NSW, said “any reduction in private services, which previously contributed to funding the hospital’s public services, is a slap in the face to a community which was promised 20 years of high-level private health care”.

Austin said the government must also explain if the hospital will maintain its status as a level 5 facility with the same array of healthcare services, and how it will fund its 494 beds.

Seventy-nine per cent of the northern beaches population have private health insurance, significantly higher than the 55 per cent nationally, data from Private Health Australia shows.

Health Minister Ryan Park said the government would work out what private services would continue to be offered at the hospital under public ownership in the next few months.

“We understand that clinicians and indeed many community members would like to see private services continue to be delivered there … what we can’t do today is outline what that model looks like,” he said.

NSW Treasurer Daniel Mookhey said the agreement delivered a publicly run hospital that puts patients before profit for the local community and at $190 million was value for money.

“The government has been clear all along that there will be no windfall gains for Healthscope,” Mookhey said.

All clinical and support staff would be offered jobs by NSW Health at the hospital.

The Australian Salaried Medical Officers’ Association (ASMOF) NSW welcomed the news, and president Dr Nicholas Spooner said the transition to public control would be critical to addressing long-standing understaffing, overwork and exhaustion issues.

In April, a NSW auditor-general’s report found the hospital failed to act on warnings about risks to patient safety and outcomes. A separate independent probe found staff had a “heightened awareness” of the hospital’s contract with the government, which could create tensions between financial imperatives and clinical priorities.

Dr Sophie Scamps, the federal member for Mackellar on the northern beaches, said the next critical step is to secure the continued delivery of the hospital’s private services, which play a vital role in ensuring timely access to essential care and reducing wait times for her community.

“The northern beaches deserves a hospital precinct that delivers the same level of care and timely access to high-quality public and private services as any other major metropolitan area,” she said.

After comments in the media incorrectly suggested NBH provided the only private hospital services on the northern beaches, Carol Bryant, the chief executive of Wyvern Private Hospital in Terrey Hills, wished to reassure the community that its 85-bed facility offered a range of surgical, imaging, pathology and allied health services. There is also Delmar Private in Dee Why. Though AMA NSW says none have the comparable facility of NBH to take on the complexity and volume of its caseload.

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